Narendra Kumar vs C.B.I.

Saroj Bala, J.—By means of this application u/s 482, Cr. P.C. the applicant seeks the quashing of charge-sheet and summoning order dated 11.5.2007, passed by the Additional Chief Judicial Magistrate Court No. 1 Ghaziabad in Case No. 1866 of 2007 u/s 3/7 of the Essential Commodities Act, 1955 P.S. Muradnagar, district Ghaziabad.

The factual position of the case is that M/s. Hazoor Sahib Chemicals Pvt. Ltd. Duhai, district Ghaziabad through its directors obtained licence on 21.12.2000 for Naphtha from District Supply Officer, Ghaziabad for usage of Naphtha as a raw material. The directors of the company in conspiracy with some unknown persons imported 11000 M Ts Naphtha in the year 2001 on payment of custom duty. A large quantity of Naphtha was diverted on the basis of false and fabricated documents such as challans, bill books, invoices for the purpose of cheating and evasion of taxes and duties. The case was investigated by the Central Bureau of Investigation. After investigation charge-sheet was submitted u/s 120B read with Sections 420, 467, 468 and 471 I.P.C. and Sections 7 and 9 of Essential Commodities Act read with clauses 3 (iv) and (v) of Naphtha (Acquisition, Sale, Storage and Prevention of Use in Automobiles) Order, 2000. On the basis of charge-sheet cognizance was taken against the applicant and five others for the offences u/s 3/7 of Essential Commodities Act.

Heard Shri V. P. Srivastava, learned senior advocate appearing on behalf of the applicant, Shri G.S. Hajela, learned Counsel for the C.B.I., and have perused the record.

The learned Counsel for the applicant argued that he is an employee of the company and was not a beneficiary in the sale and purchase transactions of Naphtha. The Naphtha Control Order, 2000, being not applicable on the date of the registration of the First Information Report. No case u/s 3/7 of Essential Commodities Act is made out. Naphtha was importable item. By Government of India Notification No. 2(RE-2001)/1997-2002 dated March 31, 2001 Naphtha was made a free importable item. The said notification superseded the Naphtha Control Order, 2000. The learned Counsel urged that M/s. Hazoor Sahib Chemicals Pvt. Ltd. held valid licence for import and usage of Naphtha. It is a case of evasion of taxes and provisions of Essential Commodities Act are inapplicable.

The learned Counsel for the opposite party argued that E.X.I.M. policy was superseded by the Government Notification and not the Naphtha Control Order, 2000. Naphtha was restricted item which could be used as fuel for power generation under licence or by a user without licence subject to the condition that he will sell Naphtha to crude oil refinery only. Naphtha became freely importable item under the E.X.I.M. policy but its acquisition was subject to the Naphtha Control Order, 2000. The condition regarding end use declaration of Naphtha to custom authorities was waived by the Government Notification dated March 31, 2001. M/S Hazoor Sahib Chemicals Pvt. Ltd. alleged to have sold 11000 M Ts. Naphtha to sixteen parties for processing the solvent but investigation revealed that eight firms purchased Naphtha and six firms disclosed sale and purchase on papers alone. One firm was found closed and one firm denied to have purchased the solvent.

I have given my thoughtful consideration to the submissions made on behalf of both the parties.

Clause 3 of Naphtha Control Order, 2000, places restriction on sale and use of Naphtha. Sub-clause (iv) of Clause 3 provides that every person whosoever is engaged in sale or trading of Naphtha either imported or indigenous, for any purpose, whatsoever, shall file end-use certificates from consumers to whom he sells and also furnish customer-wise sales to the District Magistrate or the State Civil Supplies Authorities by whatever name called, on a quarterly basis.

Sub-clause (v) of Clause 3 of the Control Order embodies that every person whosoever is engaged in actual use of Naphtha either imported or indigenous for manufacture of any petrochemicals or any other purpose shall file end-use certificates to the District Magistrate or the State Civil Supplies Authorities by whatever name called, on a quarterly basis.

The E.X.I.M. policy made Naphtha a free importable items from March 31, 2001. The Naphtha Control Order, 2000, was not superseded by the E.X.I.M. policy. After the E.X.I.M. policy the reporting to custom authorities was exempted. The condition regarding end-use declaration of Naphtha to custom was waived by the E.X.I.M. policy from 31.3.2001 but the restrictions imposed by the Naphtha Control Order, 2000, were applicable. The end-use certificate from customers to whom Naphtha was sold and customerwise sales statement were to be furnished to the District Magistrate or State Civil Supply Authorities on quarterly basis. The sale and purchase of Naphtha by the firm M/s. Hazoor Sahib Chemicals Pvt. Ltd. to eight firms was found to be fake and fictitious. The firm concern is alleged to have diverted large quantity of Naphtha and exhibited false sale on documents to different parties for processing the solvent. The applicant and two others were authorised signatory of the firm and most of the invoices of sale of Naphtha and other documents were signed by the applicant. The contents of the First Information Report and the facts unearthed by the investigation agency disclose commission of cognizable offence against the applicant. The inherent powers u/s 482, Cr. P.C. can be exercised to quash the proceedings: (i) where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction ; (ii) where the allegations in the First Information Report or complaint taken at their face value and accepted in their entirety do not constitute the offence alleged ; (iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.

Having taken into consideration the contents of F.I.R. and facts brought out by the investigating agency cognizable offence is made out against the applicant. The inherent power to quash the criminal proceedings is to be exercised in exceptional cases. The present case does not fall within the categories of cases where such power can be exercised. In view of the foregoing discussion this application lacks merit and deserves dismissal.

The application is dismissed accordingly.